Service Provision Change Defined in TUPE Case

In a ruling which clarifies what is meant by a ‘service provision change’ in the context of the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE), the Employment Appeal Tribunal (EAT) has ruled that a council constrained to take ‘in-house’ the provision of services on the expiry of a contract is the correct respondent to an unfair dismissal claim (London Borough of Islington v Bannon & Another).

Ms Bannon had been employed as a project co‑ordination manager by Community Service Volunteers (CSV), which was contracted by the London Borough of Islington to perform certain of its statutory functions under the Children Act 1989. On the expiry of CSV’s contract, and the breakdown of negotiations to transfer its role to another provider, Islington Council was obliged on a temporary basis to step in and directly meet its statutory obligations. Ms Bannon was made redundant the day before CSV’s contract expired.

In a preliminary ruling on the law, the EAT decided that Islington Council had effectively brought the functions previously performed by CSV ‘in-house’. The fact that the requirement for the Council to intervene was unexpected and that it had not satisfactorily performed all the functions previously undertaken by CSV did not mean that there had not been a service provision change for the purposes of TUPE.

The EAT’s decision opens the way for Ms Bannon to proceed with her case against the Council and to argue that the transfer of the service provision from CSV to the Council means that her dismissal was automatically unfair by operation of TUPE.